Democratic hopefuls scramble amid calls for healthcare reform

WASHINGTON —Don’t look now, but the 2008 presidential election is just a year away. And with health care one of the hottest issues of the primary campaign, Democratic and Republican hopefuls are scrambling to project a coherent vision for the future of health care that voters can live with.

Surveys in the year running up to the primaries consistently show that fixing the unwieldy, disconnected and dauntingly expensive health- care system is a critical concern to Americans. “Voters have identified health care as the leading domestic issue for the government to address and for the presidential candidates to discuss in the 2008 campaign,” noted the Henry J. Kaiser Family Foundation in a recent report. “In particular, voters would like to hear the candidates’ positions on reducing the cost of health care and health insurance and expanding coverage to the 47 million uninsured Americans.”

In general, pollsters this year are tapping into a restless mood and anxiety among voters on the issue of health care and universal coverage. Many Americans, it seems, are ready for a change in how health care is provided and paid for. And many appear far more willing to embrace some form of government-sponsored healthcare plan in 2007 than they did in the early years of the Clinton administration, when Hillary Rodham Clinton’s attempts to forge a consensus on government-sponsored health care coverage collapsed because of lack of support.

Nothing illustrates that point better than a report issued last month on a WSJ.com/Harris Interactive poll of likely voters, conducted in September. “Most U.S. adults believe the No. 1 healthcare issue the presidential candidates should address is providing coverage for the uninsured 30 percent,” noted a report on the findings from the Wall Street Journal Online’s Health Industry Edition. “With 2 million more people uninsured this year than last year, this is the top healthcare issue that both Democrats [37 percent] and Independents [30 percent] would like to see addressed.”

Despite growing support for universal coverage, Americans also remain deeply divided about who pays for it. A recent poll of seniors from The Feldman Group found that “Medicare remains the third rail of politics,” with Medicare recipients polled by Feldman overwhelming opposed to a proposal in Congress to fund the SCHIP children’s health insurance program by cutting Medicare funding.

For retail pharmacy, the stakes in next year’s election are critical. “With federal and state governments making nearly half of all healthcare payments in the United States and in an industry literally shaped by government rules and regulations, the biggest mistake we can make is to communicate too little,” noted National Association of Chain Drug Stores president and chief executive officer Steve Anderson.

To that end, pharmacy leaders also need to pay heed to each candidate’s plan for reforming health care. Here’s a shorthand look at how each of the major Democratic aspirants to the office of president stack up:

Sen. Hillary Clinton of New York, still deemed the front runner despite difficulties in a recent primary debate, wants to extend coverage to all Americans by requiring them to obtain health insurance and providing tax breaks to help them cope with premiums. Her plan also would require large employers to contribute toward health insurance costs, offer tax subsidies to small businesses to help them defray worker coverage costs and mandate that insurers couldn’t deny coverage over pre-existing conditions.

“Insurance companies won’t be able to deny you coverage or drop you because their computer model says you’re not worth it,” she told voters. “They will have to offer and renew coverage to anyone who applies and pays their premium.”

Clinton estimates her plan would cost $110 billion a year. To pay for it, she’d eliminate the Bush tax cuts for high-income Americans. She’d also focus more on preventive health and “best practices” in medicine to lower costs and target “wasteful” administrative and managed-care costs. Importantly, Clinton also would allow Medicare Part D to negotiate for lower drug prices, open up importation of cheaper drugs and generics, and focus on the costs of prescription drugs in the United States versus other countries.

Sen. Barack Obama of Illinois also promotes universal healthcare coverage and preventive health through government-funded screenings for diabetes, asthma and other conditions. A big proponent of the cost-saving benefits of health information technology, Obama sees health care improving through “partnerships among federal and state governments, employers, providers and individuals.” He’d also focus on prescription drug errors and administrative inefficiencies, and indicates that as president, he’d put a spotlight on drug prices and high insurance premiums.

“It’s time to let the drug and insurance industries know that while they’ll get a seat at the table, they don’t get to buy every chair,” he said. “Pharmaceutical companies should profit when their research and development results in a groundbreaking new drug. But some companies are exploiting Americans by dramatically overcharging U.S. consumers.”

In response, Obama would allow drug importation, promote more generic utilization in government drug programs and repeal the ban on direct government negotiation with drug companies in Medicare Part D.

To guarantee universal coverage, Obama would establish a new public health plan, available to Americans who neither qualify for Medicaid or SCHIP nor have access to insurance through their employers. He also proposes a National Health Insurance Exchange “to help Americans and businesses that want to purchase private health insurance directly.”

Obama also wants to boost federal support for disease-management programs. “Over 75 percent of total healthcare dollars are spent on patients with one or more chronic conditions,” he noted. “Many patients with chronic diseases benefit greatly from disease-management programs, which help patients get the care they need.”

To that end, Obama would require health plans participating in any government program to offer disease-management programs.

North Carolina Sen. John Edwards has unveiled a detailed health plan that calls for universal coverage through a public-private partnership of government and tax-incentivized employers who would be required to provide coverage or financial help to their employees. He’d also create new tax credits to help Americans buy insurance, expand Medicaid and SCHIP, and create regional “Health Care Markets” to help “every American share the bargaining power to purchase an affordable…health plan” and boost consumer choice.

Edwards also would require insurers to spend at least 85 percent of their premiums on patient care, and promote Health IT to “help doctors avoid duplicate tests and conflicting prescriptions.” He’d also work to “eliminate loopholes and trade obstacles that block generic drugs, and let the FDA approve biogenerics, saving up to $43 billion over 10 years.” Edwards also wants to restrict direct-to-consumer advertising by drug makers, and would allow drug importation and drug-price negotiation in Medicare.

Big crowds greet Tesco debut in Los Angeles

LOS ANGELES Tesco wanted to make a good impression with its Nov. 8 Fresh & Easy debut in Los Angeles—a city where image is everything—and it did just that with a huge crowd jamming the aisles on opening day. Company officials reported similar turnouts at five other grand openings in Southern California and acknowledged customer response exceeded expectations.

More than one hundred people stood in line waiting to get into the Los Angeles store, with employees letting customers in as others left. And what they saw inside was a Tesco’s new hybrid combining elements of Trader Joe’s, Whole Foods and 7-Eleven with some borrowings from its stores in Europe.

The basic concept of Fresh & Easy is a convenient shopping experience with an emphasis on healthy food and prepared meals from its Fresh & Easy private label. During a brief tour of the crowded store, Uwins explained that 50 percent of its food offerings are from its private label and that everything is created, cooked and packaged at its own state-of-the art “kitchen” in Southern California, including all of its prepared meals.

“We expected pre-prepared meals to be a massive hit here in the U.S.,” said Simon Uwins, Tesco’s chief marketing officer. “And so far, judging from the gaps we see in our refrigerated cases, they’re being cleared out rather fast.”

Several things set Fresh & Easy apart from other grocery retailers like Trader Joe’s and Whole Foods, the two it resembles the most. As Uwins mentioned, its Fresh & Easy private label has a 50 percent penetration rate and is represented in nearly every major food category including produce, meat, prepared meals, juice, coffee and mixed nuts.

And that reliance on private label allows it to offer some very competitive prices. Overall, Tesco says its prices are well below its main rivals at standard supermarkets. “We estimate our prices are about 20 percent lower than most supermarkets in the area,” said Uwins.

Its selection general merchandise, health and beauty and over-the-counter medications is small supermarket standards and runs more along the lines of a convenience store, though with a broader assortment. Basics like paper towels, diapers and pet food are stocked in a single aisle and its HBC and OTC products are located on one long shelf toward the back of the store capped with a section for greeting cards and magazines.

The rather small selection—and the complete lack of private label products—shows Fresh & Easy is primarily about the food, though that could change. “There are no private label products outside of food right now but that’s not to say that won’t change,” said Uwins.

The in-store signage is also unique and stamps Fresh & Easy as an organic and eco-friendly retailer, a good image for Southern California. Nearly every green, cardboard endcap features a message about its products including “all our bagged coffee is certified organic” and “our desserts contain 0 percent trans fats.” LED lighting is also used in the store, something else pointed out in its signs. The store doesn’t sell cigarettes but do carry a large selection of wine along with liquor and beer.

The checkout system is completely automated with 100 percent assisted self-checkout. Five checkout stands are small and designed for 15 items or less and the rest are a bit larger with scanners and self-pay systems (though there were plenty of employees nearby to help out people not familiar with the concept).

As expected, Tesco had some detractors at its grand openings in the form of labor unions and neighborhood groups. The Carpenters Local 1506 picketed in front of the Los Angeles store and handed out fliers claiming that a group hired by Tesco to help build its stores “does not meet area labor standards, including paying for health care and pension for all its employees on all projects.”

Tesco has a second wave of five openings planned for Las Vegas on Nov. 14 and plans to have stores open in the San Diego market in late November and Phoenix in early December. It expects to have 50 stores operating in California, Nevada and Arizona by next February.

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